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The High Court of Australia has unanimously held that the grant of a mineral lease in the 1960s does not extinguish native title rights and interests, but rather suspends native title until the lease ends. The decision provides important clarification on the operation of common law extinguishment, and has potential implications for other state grants, such as pastoral leases.

BACKGROUND

The central issue in the Brown case was whether native title had been extinguished by the grant of mineral leases or subsequent development and construction on the land pursuant to the leases.

In 1964, the State of Western Australia made a State Agreement with a mining joint venture to develop and exploit iron ore deposits at Mount Goldsworthy, located in the resource-rich Pilbara region of Western Australia.

The State granted two mineral leases to the joint venture pursuant to the State Agreement. The joint venture in turn agreed to construct a mine, a town and associated infrastructure, and agreed to allow the State and third parties to have access over the mineral leases, provided that the access would not unduly interfere with its operations.

The Ngarla People were later granted a number of non-exclusive native title rights and interests over land in the Pilbara region, but the question of whether these rights extended to the land subject to the mineral leases was unresolved. The Ngarlga People’s sought non-exclusive native title rights over the land including the right to access and camp on the land, to hunt and take traditional resources (excluding materials), and to maintain and protect particular sites and areas of significance.

It was not in dispute that the Ngarla People held native title over the land where the mineral leases were located. The issue before the High Court was whether the mineral leases had extinguished the native title in that area, either because:

the grant of the mineral leases conferred on the joint venture a right of exclusive possession;

the grant of the mineral lease conferred rights that could not coexist with the native title rights, as both sets of rights could not be exercised simultaneously; or,

the exercise of the rights conferred by the grant of the mineral leases, being the construction and development of the mine, a town and associated facilities and infrastructure on the land, had extinguished native title rights and interests.

THE JUDGMENT

The High Court unanimously held that neither the grant of the mineral leases, nor the exercise of rights conferred by the leases to build the mine, the town and associated infrastructure, extinguished native title.

The High Court began by reaffirming that the test for determining common law extinguishment of native title[1] is whether the rights granted by the mineral lease were inconsistent with the Ngarla People’s native title rights and interests. This was an objective enquiry requiring the identification of and comparison between the two sets of rights.

The High Court then examined the three bases on which native title was alleged to have been extinguished. In relation to ‘exclusive possession’, the High Court reiterated its earlier decision of Fejo v North Territory[2], which made clear that exclusive possession affords an unqualified right to exclude any and everyone from access to the land. Neither the State Agreement nor the leases themselves gave the joint venture a right to exclusive possession of the land. Indeed, the State Agreement provided that the joint venture had to allow the State and third parties access to the mineral leases; a clear indication that the joint venture did not have exclusive possession of the land.

In determining whether both sets of rights could coexist, the High Court stated that the Wik[3] and Ward[4] decisions had found that the grant of rights to use land for particular purposes (such as pastoral leases or mining leases), if not accompanied by a right of exclusive possession, is not necessarily inconsistent with non-exclusive native title rights. In this case, the mineral leases gave limited rights to the joint venture to carry out mining and associated works, which was not inconsistent with the coexistence of the Ngarla People’s native title rights. The High Court qualified this, stating that any competition between the exercise of the two sets of rights must be resolved in favour of the rights granted by statute. But when the joint venture ceases activities on the land, the Ngarla People’s native title rights and interests will be re-enlivened, unaffected by the grants.

Finally, the High Court found that it was the legal content and nature of the rights granted by the lease, rather than the manner in which those rights were exercised, that was key. The fact that the joint venture had, in fact, built improvements on the land did not extinguish native title. It was necessary to go back and look at the rights conferred by the grant to determine whether they extinguished native title, rather than looking at whether improvements had been built on the land.

WHAT CAN WE TAKE FROM THE DECISION?

Clarification of common law extinguishment

The High Court’s decision is significant in clarifying some the principles relating to common law extinguishment of native title. In particular, the High Court chose not to follow the Full Federal Court’s decision in De Rose v South Australia (No 2)[5]. The De Rose decision held that the grant of a pastoral lease conferring rights to construct improvements on the land did not extinguish all native title rights, but importantly, the exercise of these rights (such as by building a homestead) did extinguish all native title on the land where the buildings are located, and any adjacent land.

The High Court stated that De Rose was “wrong” and should not be followed. The legal content and nature of a right conferred is pivotal, rather than the manner in which it is exercised. The manner in which a right is exercised is only important to the extent to which it identifies the true nature and content of the rights which were granted.

The High Court also noted that there cannot be “degrees of inconsistency of rights”, and that two rights are either inconsistent, or they are not. In addition, the question of inconsistency was to be determined as at the time of the grant of the relevant right.

It should be noted that in most cases extinguishment of native title occurs by operation of the Native Title Act 1993 (Cth) (NTA). However, it was common ground between the parties in this case that the grant of the mineral leases was not covered by the extinguishment provisions of the NTA, and was instead resolved in accordance with principles of common law extinguishment.

CONCLUSION

The High Court’s decision has implications for pastoral, mining and other specific purpose leases granted prior to 1975 that do not confer a right of exclusive possession. Governments and lease holders should review such leases and consider whether they contain an express or implied right of exclusive possession, and recognise that improvements or other developments on lease sites will not necessarily extinguish native title.

The likelihood that the decision will impact future native title compensation determinations (given the High Court’s finding that native title rights were not extinguished, but temporarily suspended) is remote. This is because compensation is only payable for extinguishing acts that occurred after 1975, being the commencement of the Racial Discrimination Act. As outlined above, this case was concerned with a mineral lease granted prior to 1975 and determined in accordance with common law extinguishment, and there is no common law right to compensation for the extinguishment of native title rights and interests.

More broadly, cases involving pastoral, mining and other specific leases granted prior to 1975 will now be determined by courts according to common law extinguishment. The Brown judgment is the third decision in recent months where the courts have found in favour of the coexistence of native title rights (see our publication on Native Title Fishing Rights); preferring the notion that native title is temporarily suspended, rather than extinguished. The trend indicates that principles of common law extinguishment are more favourable to native title claimants than the extinguishment provisions under the NTA.

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